Smartphone video of Dao, a doctor, resulted in a PR disaster for United after he refused to give up his seat on the plane at O’Hare international airport in Chicago.

Footage revealed him screaming before being knocked out as he was dragged along the aisle while fellow passengers looked on and protested.

All passengers on United Express flight 3411 will be compensated equal to the cost of their tickets and could take the compensation in cash, travel credits or miles, United said this week.

The airline, whose advertising slogan is “fly the friendly skies”, was also ridiculed on social media as the incident became a symbol of growing discontent with the way some air passengers are treated.

Dao’s lawyer, Thomas Demetrio, said United added insult to injury by also losing his client’s luggage.

The airline said the change to its employee booking policy was an initial step as it reviewed policies to “deliver the best customer experience”.

The board of United Continental said the company had to devise policies to win back customer trust and apologised to Dao and his family.

It added that it stood behind its chief executive, Oscar Munoz, who was heavily criticised for his initial response to the matter. He had said that Dao had been “disruptive and belligerent” and told the airline’s employees that they had “followed established procedures”.